Don't look now, but copper inventories continue to plunge. Recently breaking below 350K tons at the LME Copper Warehouse according to kitco.com. According to the charts below, inventory levels have hit a 2 year low recently.
Hard to tell whether China is stockpiling, demand is increasing, or supplies are struggling. Our focus continues to be that the copper market has yet to see the demand equation of both a strong China market and a growing US market. The US peaked back in 2006 long before China approached current levels. Even in the current scenario of weak US demand, copper has struggled to keep up with demand.
Freeport McMoran Copper (FCX) is naturally the best play in copper. Still think the copper market will see prices in the $5-6 range before this cycle tops out. Naturally FCX would see record prices when that happens.
30 day chart from Kitco:
5 year chart from Kitco:
Disclosure: Long FCX. Please review the disclaimer page for more details.